Subrahmanyam Jaishankar, India’s external affairs minister, is planning a trip to Moscow later this month to review bilateral agreements and discuss connectivity initiatives, including the South Asian country’s investments in Russia’s emerging Far East Region, the Economic Times reported on Monday.
In addition to these issues, Jaishankar is anticipated to discuss boosting bilateral trade and making settlements in national currencies. The diplomat will also be briefed on the Ukraine conflict by Russian officials, sources familiar with the matter informed the outlet.
Moscow’s economic engagement with New Delhi is at an all-time high against the backdrop of Western sanctions against Russia, prompting the country to expand economic ties with Asian countries. According to officials, bilateral trade has already reached $50 billion in the first nine months of 2023.
Indian investments in Russia have come to about $14 billion thus far, and Russian capital expenditures in the South Asian country have so far totaled $16 billion, the head of the Russian Trade Representative Office in India, Aleksandr Rybas, said last week. Moscow has amassed a surplus of over $40 billion in special vostro accounts held in Indian banks in the domestic currency due to payment settlement issues after Russia was cut off from the most commonly used international payment system, SWIFT.
In recent years, New Delhi has ramped up oil, coal, and other imports from Russia, making the issue of settling transactions in national currencies more relevant. Last month, Russian Ambassador to India Denis Alipov called for “extra efforts” from Indian banks to adopt the mechanism. Officials from both countries have also discussed the trade imbalance between the two sides. Effective logistics is a critical element for enhancing bilateral trade.
India and Russia, along with Iran, have shown enthusiasm for the prospective 7,200 km-long International North-South Transport Corridor (INSTC). Initially envisioned to connect the Russian city of St. Petersburg on the Baltic Sea to Mumbai in India via the Caspian Sea and Iran, the INSTC received its inaugural shipment of goods at Jawaharlal Nehru Port in Mumbai in 2022, originating from the Astrakhan Port in Russian.
The ongoing development of this corridor aligns with the vision of Indian Prime Minister Narendra Modi, who, in 2022, urged Shanghai Cooperation Organization (SCO) member nations to foster reliable, robust, and diversified supply chains in the region.
Last week, Russian President Vladimir Putin mentioned plans to expand the INSTC further by connecting it to Murmansk, which would link major Indian transport hubs to a key Russian seaport in the Arctic. “Shipping goods from Murmansk to Mumbai would only take 15 days,” Putin said on Friday, adding that it would be four times faster than it is now.
Western countries have scrutinized New Delhi for maintaining close trade and diplomatic ties with Russia and not abiding by their sanctions against Moscow. India has also abstained from all resolutions against Russia at the United Nations since February 2022. Brushing off criticism at an event in New Delhi earlier this month, Jaishankar said that New Delhi’s partnership with Moscow has “saved” India “at times.” He said, “Just looking at the map, it makes sense that India and Russia would have strong relations.”
During a visit to the US in September, Jaishankar described New Delhi’s relations with Moscow as “extremely steady.” He noted that the two countries take “great care” to avoid disrupting ties. Earlier this year, the diplomat stressed that “many parts of the world do not accept the concept of sanctions in the same way” and asserted that buying Russian oil has been in New Delhi’s “best interests.”
Jaishankar has met his Russian counterpart Sergey Lavrov several times this year to discuss continued bilateral cooperation in various areas of mutual interest.
